RealtyTrac released a joint report with Down Payment Resource analyzing the impact of down payment assistance on the cost of buying a home — including the down payment and monthly house payments for a median-priced home in 513 counties nationwide. The report was released at the National Association of Real Estate Editors 50th Annual Journalism Conference in New Orleans. Here’s what was concluded:
The report found that across all 513 counties analyzed, buyers using available down payment assistance programs can save an average of $17,766 representing 41 percent of a year’s wages compared to buyers who do not use down payment assistance.
The total savings breaks down to an average savings of $5,965 on the down payment for a median-priced home, and an average savings of $11,801 on monthly house payments over the life of the loan for a median-priced home.
The report combined public record sales deed data for single family homes and condos collected by RealtyTrac with average down payment assistance data collected from 2,477 down payment assistance programs across the country by Down Payment Resource along with the latest average weekly wage data available at the county level from the Bureau of Labor Statistics.
“Saving for a down payment can be difficult for prospective first-time homebuyers given the absence of substantial wage growth in recent years combined with the burden of student loan debt many are struggling under,” said Daren Blomquist, senior vice president at RealtyTrac. “Even just a 3 percent down payment requires 14 percent of annual wages on average across the 513 counties we analyzed, and in 67 counties a 3 percent down payment requires more than one-fifth of annual wages.”
“Homeownership programs not only help buyers overcome the initial cost of purchasing a home, but also produce a compounding positive impact on the homeowner’s saving and wealth-building capability,” said Rob Chrane, CEO at Down Payment Resource. “In fact, these programs are now the last frontier in the fight to preserve homeownership affordability. Rates are never going to be substantially lower, and home prices continue to trend higher.”